The £135 relief is going, and no simplified rate replaces it
HMRC's July 2026 consultation response settles three things and leaves two open. What is already knowable about the bill, using the rates that will apply.
The rule that decides whether a parcel into Britain is charged anything at all is being removed. On 13 July 2026 the Treasury published its response to the consultation on low value imports, and it settles three questions that had been open since the Autumn Budget of 2025.
The relief goes. The full tariff applies. And there will be a government fee on top.
Two questions it does not settle: how big that fee is, and whether import VAT moves to the border. Those are the ones that decide the size of the bill.
What was decided
The £135 relief is removed, and the new arrangements are mandatory. The government will “mandate the use of the new LVI customs arrangements for eligible consignments valued at £135 or less” (paragraph 3.7). Voluntary or partial adoption was considered and rejected.
The deadline moved forward. Having “listened carefully to stakeholder views on timelines”, the government “decided to accelerate the delivery by 6 months to October 2028 at the latest” (3.11). Stakeholders asked for time; they were given six months less of it.
There will be no simplified tariff. This is the decision that matters most for what you will pay, and it went the harder way. The government “decided not to introduce a simplified tariff schedule” (4.17); instead, “traders will be required to classify goods and apply the appropriate UKGT rate, in line with standard UK import customs arrangements” (4.18). A simplified schedule would have meant a small number of blunt rates. Instead every parcel gets the same treatment as a freight container: classified to its commodity code, charged at that code’s rate.
A fee is confirmed but not sized. “To reflect the high proportion of import volumes accounted for by LVIs and the associated administrative cost, the government will introduce an additional fee in relation to LVIs” (5.13). The consultation had floated £0.50, £2 or £5 per consignment as illustrative figures. The response says only that the government “is still working through the design” (5.14).
The document draws on 165 responses to a consultation that ran from 26 November 2025 to 6 March 2026.
What is already knowable
Because there is no simplified schedule, the duty on a small parcel after 2028 is not a mystery. It is the UK Global Tariff rate for that commodity code — the same rate this site already publishes for consignments over £135, and the same one a freight importer pays today.
| Goods | UKGT rate | Duty on a £65 parcel | Duty on a £125 parcel |
|---|---|---|---|
| Clothing | 12% | £7.80 | £15.00 |
| Home textiles | 12% | £7.80 | £15.00 |
| Footwear, most types | 16% | £10.40 | £20.00 |
| Coffee, roasted | 6% | £3.90 | £7.50 |
| Bicycle parts | 4% | £2.60 | £5.00 |
| Bags and luggage | 2% | £1.30 | £2.50 |
| Headphones, laptops, phones | 0% | £0.00 | £0.00 |
Duty is charged on the customs value, which includes shipping — so a £60 jumper with £5 postage is assessed on £65, not £60. The rates come from the same dataset behind every rate page here; the footwear range runs 2% to 16% depending on what the upper is made of.
The last row is worth dwelling on. Consumer electronics is mostly zero-rated under the Information Technology Agreement, and removing the relief changes nothing about that. A £90 pair of headphones pays no duty today and will pay none in 2029. The reform bites on clothing, shoes and textiles — the categories where the tariff was never low.
The VAT is not new money, but it grows
This is where the reporting has been loosest, so it is worth being exact.
Import VAT is already paid on a sub-£135 parcel. Since January 2021 the seller or marketplace charges it at checkout rather than the border, which is why the parcel arrives with nothing to pay. The consultation response does not decide whether that continues: the government “will continue to consider the role of VAT collection mechanisms” (6.19), weighing point-of-sale collection against border collection.
So VAT is not a new cost. But it does get bigger, whichever way that goes, because duty enters the VAT base. On our £65 consignment, VAT today is 20% of £65, or £13.00. After the reform it is 20% of £65 plus the £7.80 of duty — £14.56. The extra £1.56 is VAT charged on the duty.
What the parcel actually costs
A £60 jumper from China with £5 postage, before and after.
| Today | After October 2028 | |
|---|---|---|
| Goods and postage | £65.00 | £65.00 |
| Customs duty | £0.00 | £7.80 |
| Import VAT | £13.00 | £14.56 |
| Carrier clearance fee | £0.00 | £8.00 |
| Government LVI fee | — | not yet set |
| Total | £78.00 | £95.36 + fee |
That is £17.36 more, or 27% on the order value, before the government fee is added at all. If the fee lands at the £5 end of the illustrative range, it is £22.36.
The £8 is Royal Mail’s, and it is the quiet one. Royal Mail charges its handling fee only where HMRC actually raises a charge. On a sub-£135 parcel today there is no charge to raise, so there is no fee. After 2028 there will be a charge on almost every clothing parcel — which means a fee on almost every clothing parcel. And £8 is the cheap end: FedEx’s minimum on the same parcel is £12.90.
Note what that does to the ranking. On a £65 order the duty is £7.80 and the carrier’s fee is £8.00. The fee for collecting the tax is larger than the tax.
What is still open
Two numbers decide how bad this is, and neither exists yet.
The fee. £0.50 and £5 are an order of magnitude apart. Respondents mostly favoured charging per consignment rather than per item, and pointed out that a per-item fee would charge a two-item parcel twice (5.8–5.10). The government has not said which it picked.
The VAT model. If it moves to the border, the buyer pays £65 at checkout and meets £30.36 plus the fee at the door. If it stays at point of sale, the seller has to know the duty in order to charge VAT on it — and that is precisely the difficulty the response flags, recording “mixed views on the feasibility of calculating VAT at the point of sale where customs duty applies” (6.21). A seller who charges VAT on the goods alone under-collects by 20% of the duty: £1.56 on our jumper, on every parcel.
The total is the same either way. What changes is how much of it arrives as a surprise, and who is expected to work it out.
Why this is on a rate site
Every UK page here currently carries the sentence that consignments at or under £135.00 are relieved of duty. That sentence has a date on it now.
We will not change those pages before the law does — a rate that is wrong today because it is right in 2028 is still wrong. But the rates in the table above are already published here, on the pages that describe what happens above £135. From October 2028 they describe what happens below it too.
Rates in this article are from the UK Global Tariff as held on 10 September 2026. Policy figures are quoted from the consultation response by paragraph number so they can be checked. Nothing here is settled until the statutory instrument is laid.
Figures quoted above were correct on 10 September 2026. Rates change; the pages linked from this guide carry the current ones, refreshed from the source.